In order to operate a vehicle in the state of New Jersey you must have car insurance. Actually, you must have three specific, mandatory forms of insurance. These forms of insurance are as follows:
Liability insurance - This type of insurance pays for any damages that are the direct result of the operator's liability. In other words, this insurance covers any damage that results from an accident in which the driver is responsible for. Please note, however, this type of insurance provides no coverage for medical expenses.
Personal injury protection (PIP) - This is the specific type of insurance that will cover medical expenses for both the driver and anyone else who is injured in the accident. This policy is also commonly dubbed "No Fault" insurance because medical expenses will be covered whether the driver or another party is at fault for the accident. In a way, it is a blanket policy as far as fault is concerned.
Uninsured motorist coverage - The title of this type of insurance is self-explanatory. It covers a driver during instances when the accident is caused by a motorist who lacks insurance. Contrary to what many assume, many drivers are without insurance mainly due to allowing their coverage to lapse from non-payment.
Then, there is another type of coverage that does not always receive much mention. It is...
Underinsured motorist coverage - This is identical to uninsured motorist coverage with one main difference: the person who causes the accident has insurance but the damages incurred from the accident exceed the coverage on his policy.
It is also important to point out that in New Jersey, drivers have the option to pass on No Fault options and invoke their right to sue for any damages they may incur. This is known as seeking a tort option. Actually, there are two spheres to the tort option and they are known as limited torts and full torts.
Limited Tort - This option allows the injured party in a car accident to sue for medical expenses and expenses derived from damage to the car. However, there are restrictions (limitations) in place as well. For example, anyone who selects this option will not be entitled to seek an award based on pain and suffering.
Full Tort - Essentially, this variant places all options on the table in a lawsuit. That is, the plaintiff can seek compensation for medical expenses, damage to the vehicle, pain and suffering, and any other non-monetary damages.